More than 40% of business owners expect it will be a year or more before their business rebounds from the great recession.The February results of the Discover Small Business Watch show a slight decline in small business confidence from January. The results indicate the small business owners expect economic conditions to remain largely unchanged in the coming months. Despite the flatlining confidence of the survey results so far this year, the numbers do indicate buoyed confidence from a year ago: The February 2010 index sits at 84.9 compared to 71.9 in February 2009.
Sponsored by Discover Financial Services, the Small Business Watch is a monthly index of the economic confidence of the nation's 22 million businesses with 5 or fewer employees. Among the findings from the February survey index are:
Economic conditions are putting the pinch to these small business owners. 71% say that the current economic climate has hurt their business; that's an increase from 69% in October 2009. 41% say that it will be more than 12 months before their business rebounds.
The depressed state of these businesses obviously isn't impetus for a hiring boom. Yet other data do indicate job growth in the SMB sector. According to data released by Inuit this week, U.S. small businesses employed more people in February than the month before, continuing an 8-month trend of rising small business employment. However, the Small Business Watch response was less bullish on hiring - 30% haven't hired anyone with the last 2 years. Moreover, the proposed hiring tax credit isn't likely to prompt hiring -- 69% say that it is "not very likely" or "not at all likely" to hire new employees if offered a $5,000 tax credit.
The much discussed SBA loan programs appear unlikely to spur business growth either based on these results: 91% of small business owners that they have never applied for an SBA loan and 61% are "not very likely" or "not at all likely" to apply for a SBA loan if they become easier to get. Government assistance appears to have little truck with this survey sample at least in the form of tax credits or loans. Tax cuts, however, are another matter. When asked to compare the benefits of tax cuts to looser credit for small business, 48% preferred tax cuts, with 31% in favor or easier access credit.
The complete findings of the Discover Small Business Watch are available here.
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